Auto accidents are a part of the practice of driving. Even the most careful drivers can make a mistake, or simply be at the wrong place at the wrong time when someone else strikes their vehicle. Damages can range anywhere from a dented fender to a totaled car.
That’s why smart drivers always carry ample auto insurance. If they cause an accident, the insurer will pick up the tab for repairs to the victimized vehicle (or property). If their own vehicle is damaged and they’ve purchased the right coverage , their policy will cover repair costs.
This begs the question: how exactly do auto insurance companies determine the amount of money to pay out for vehicle repairs?
What Happens When You File an Insurance Claim?
While the specifics of the process can vary from insurer to insurer, the basic procedure is usually the same. The insurance company determines what parts and components need to be repaired or replaced, and then it arrives at a figure which is designed to cover the necessary costs. Then the insurer makes arrangements with a repair facility to carry out the required work, and either pays the shop directly or issues a check to the policyholder (minus the deductible, of course).
How do insurers figure out what repair or replacement work needs to be done? Many companies employ appraisers to go out and look at the specific vehicles. Often, they’ll allow repair facilities to handle that function. In some cases, photos submitted by the vehicle owner will suffice.
Insurance Repair Cost Estimates
As far as assigning dollar amounts to parts or repairs, these particular methods differ by company. Some utilize what is known as a Mitchell Manual to estimate the costs of new parts and components. A Mitchell Manual (which used to be a fat catalog, but is now an electronic file) contains the exact cost of every object that goes in or on every kind of vehicle in use today. The document also has information on the type and amount of labor needed to repair or replace a given part.
After estimating labor costs per hour and any other related fees, the insurer arrives at a total amount of money which it will pay out to have a vehicle restored to its original condition before the collision (or as close as is practical). Of course, an insurance firm won’t pay out more than the monetary limits stipulated in the owner’s policy.
What Does “Totaling” Mean?
Sometimes, an insurance company will “total” a vehicle if it has been seriously damaged in a collision. Totaling a vehicle simply means that the insurer’s cost estimates to fix a damaged vehicle exceed the current market value (or a predetermined percentage of that value) of the vehicle itself. For example, if a ten-year old sedan with a Kelly Blue Book value of $4,000 will require $5,000 worth of replacement parts, the insurance company will elect to total the car. When this happens, the owner receives an amount equal to the value of the vehicle prior to the accident.
Ask Your Insurer
If you have any questions about how your insurer estimates repair costs, ask your agent or insurance company representative. It’s also wise to check with these individuals before you make any major changes to your auto insurance policy. If you aren’t satisfied with your current auto insurer for any reason, Auto Insurance Specialists can help you find a suitable, affordable policy that fits your needs and desires. Just call AIS today at 888-772-4247 or visit our website to get a rate quote within minutes.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.
